The American bacon producer, Smithfield Farms, now operates a dozen vast industrial pig farms in Poland. Importing cheap soy feed from South America, which the company feeds intensively to its tens of thousands of pigs, it has caused the price of pork to drop dramatically in the past couple of years. Since E.U. membership, the prices [paid to farmers for] pork and milk have dropped 30 percent.
As a result, once-successful, diversified farms — ones using traditional techniques now celebrated in the U.S. and Western Europe as "organic" — are struggling mightily to survive.
Polish farmers are learning about the rigors of U.S.-style consolidation, where big corporate buyers dictate terms and give small farms the ultimatum put so succinctly by former U.S. Ag Department czar Earl Butz: get big or get out. The IHT talked to one farm family less than happy with the new order:
In a small barn covered matted with straw, Barbara and Andrzej Wojcik feel like outcasts. They used to make a decent living selling pork from pigs they raised as well as the milk and butter from their six cows. But they said with the price of pork so low they could not afford to raise pigs the traditional way. As for milk, their local collection station closed, so they have no way to get their products to market, even if they were to invest in buying the required stainless steel equipment.
Smithfield, the globe’s largest pork packer and hog producer, has a rather different assessment on the new order. In addition to its foothold in Poland, it has also moved into Romania. In a speech to investors a couple of years ago, CEO Larry Pope laid out the company’s European strategy in blunt terms (quoted in Food Production Daily):
Politically, [expansion into Eastern Europe] is acceptable and we’ve got people in Western Europe who make 20 euro an hour when you’ve got people in Eastern Europe who make one and two euro an hour … You’ve got land in Western Europe, very hot place. Land in Eastern Europe they will virtually give you. Plants in Western Europe are very expensive. Plants in Eastern Europe, they will virtually give to you for small dollars.
With all that "small dollar" labor, land, and infrastructure, the company hopes to make big dollars (or, rather, massive euros) selling pork to affluent consumers in Western Europe, which it can seamlessly access through Poland’s and Romania’s membership in the E.U.
Not surprisingly, farmers in Poland are furious. The IHT reports that hundreds of Polish farmers, upset at low hog prices, have been demonstrating at the prime minister’s office. They have reason to be restive.
In the 1990s, Smithfield perfected the meat industry’s infamous "vertical integration" strategy that it’s now unveiling in Eastern Europe. In an old-school meat market, packers bought livestock from independent farmers. But starting in the early ’90s in the United States, dominant meat packers began to raise vast numbers of their own animals, stuffing them into concentrated animal feedlot operations (CAFOs).
In doing so, they put independent farmers in direct competition with their own livestock operations — a game that the meat packer usually wins. Farms go out of business in droves, unable to sustain themselves on the low prices offered by the packers; survivors scale up, mimicking the packers’ intensive techniques. That is, they CAFOize, using debt to erect large confinement buildings into which they stuff thousands of hogs. Most of them essentially cede their independence, working under contracts wherein the packers supply the feed and the hogs.
The trends now playing out in Poland has already flattened small farmers in Iowa and North Carolina. When Smithfield first bulled its way into Poland in 1999, after buying an old state-run processing plant, it declared its intention to make Poland "the Iowa of Europe."
To see precisely what the company meant by that, look what happened in Iowa and North Carolina in the 1990s, when Smithfield and a few other packers took it by storm. Just as the company is now explicitly targeting Eastern Europe for its "small-dollar" assets and labor force, it settled on depressed rural regions of Iowa and north Carolina two decades ago.
Here’s what happened in Iowa: Between 1992 and 2002, the state lost two-thirds of its hog farms and gained more than a million hogs. That meant average hogs per farm ballooned from about 350 to about 1,500. Since 2002, the state has shed thousands of farms and added millions of pigs, inflating the average even more. Similar conditions hold sway in North Carolina.
Poland and Romania are only now getting a taste of the sort of environmental and social devastation wrought by intensive hog farming. Here’s hoping they beat back Smithfield and establish their right to sustainably produced, delicious food and a robust small-farm sector.